President Donald Trump signed an executive order Wednesday imposing import tariffs of 25% on all cars, light-duty trucks and certain auto parts imported into the U.S.
The tariffs will go into effect April 2 and will apply to finished vehicles and certain auto parts that are shipped into the country, including American brands whose vehicles and parts are assembled outside the U.S.
The current tariff on vehicles imported into the U.S. is 2.5%.
“What we’re going to be doing is a 25% tariff for all cars that are not made in the United States,” Trump said at a news conference from the White House. “We start off with a 2.5% base, which is what we’re at, and go to 25%.”
The executive order says the tariffs will take effect at 12:01 a.m. EDT on April 3 for imported vehicles, and on the “date specified in the Federal Register for automobile parts, but no later than May 3.”
The latest tariffs are an escalation of the Trump administration’s use of aggressive trade measures in an effort to boost domestic manufacturing in the U.S.
“If you build your car in the U.S., there is no tariff. That means a lot of companies will be in great shape because they’ve already built their plants,” Trump said. “I think our automobile businesses will flourish like it’s never flourished.”
Related: China stops importing liquefied natural gas from US due to tariffs
In 2024, the U.S. imported $219.49 billion worth of cars, a 4% year-over-year increase from 2023, according to trade data platform US Import Data.
Mexico was the top source of imported vehicles to the U.S. in 2024 at $49.98 billion, followed by Japan ($40.76 billion), South Korea ($38 billion), Canada ($28.4 billion) and Germany ($25.59 billion).
Auto industry experts said the tariffs could drive up prices of new cars significantly.
Auto services provider Cox Automotive said on Wednesday vehicles imported from Mexico and Canada could see cost increases of $6,000 if the 25% tariffs are implemented next week, according to Reuters.
About 44% of new vehicles sold in the U.S. are imported, Cox Automotive said.
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